Kickstarter raised almost $120m last year

Company's revenue around $6m

Benjamin Jackson at The Next Web has managed to scrape out some numbers from the crowd-funding site Kickstarter, and estimates the company has raised $119m in successful projects in the last year:

That’s almost three times as much as the amount raised during the company’s first two years. Taking into account Kickstarter’s 5% commission, we can estimate that the company took home just shy of $6m in commission revenue in its third year. And it’s not the only one cashing in: with Amazon’s commission of 2.9% plus 30¢ per transaction, the online retailer pulled at least $3m in fees during the same period.

Adding in the figures from last year, it looks like Kickstarter has helped raise a total of $159M since its inception.

Those figures also exclude any project fully funded but not yet completed – including the Pebble watch, the most successful Kickstarter project to date, which has raised over $6m already and has almost a month until its funding period is over.

Jackson also looks at what we can expect from Kickstarter in the future. It's back-of-a-napkin stuff, but if the company keeps growing at the apparently exponential rate that it is now, it will hit half a billion dollars raised towards the end of next year.

Two questions follow from this: Where now for Kickstarter, and what does this mean for the wider economy?

The number that jumps out at me from the Jackson's analysis is the profit Amazon is making for processing payments. Kickstarter is fairly strongly tied to the retail giant, which runs the only online payment platform that offers the ability to reserve, but not take, a payment. This is crucial for Kickstarter's model, since it relies on being able to guarantee backers that they won't be charged unless a project is successful, while ensuring that when the time comes to ask for the money, people pay up.

It must be sorely tempting to try to drive down Amazon's share of the revenue, but without any potential to switch to an existing competitor, Kickstarter isn't in a position to drive hard bargains. If it had a cash injection, developing its own may become a possibility – but even then, it appears to have higher priorities, like expanding outside of the US (anyone can back a Kickstarter project, but only American citizens can start one).

What about the other way round? Amazon has retail expertise, close ties with the company, and already runs most of its infrastructure (as well as payments, Kickstarter is hosted on Amazon's cloud computing platform). Could Kickstarter be an acquisition target? Maybe, but there is a risk of slaying the golden goose. Amazon already makes millions from Kickstarter for comparatively little effort; unless that money is at risk, Amazon would be well advised to sit back and rake it in.

More broadly, it may seem strange to talk about what a company through which "only" $100m passes annually – a rounding error in the American economy – but that isn't how Congress seems to view it. A key provision in the recent JOBS Act allowed Kickstarter, and companies like it, to give backers not only rewards, but actual equity in the companies they choose to support. The act was subject to a lot a criticism for these measures, including by supporters of the "crowdfunding" model, but even if the implementation was shoddy, there is no doubt that it reflects a broader trend. Soon, we'll all be venture capitalists – and Kickstarter will be the middleman raking in the fees.

The Pebble watch, the highest funded Kickstarter project to date.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Who will win in Manchester Gorton?

Will Labour lose in Manchester Gorton?

The death of Gerald Kaufman will trigger a by-election in his Manchester Gorton seat, which has been Labour-held since 1935.

Coming so soon after the disappointing results in Copeland – where the seat was lost to the Tories – and Stoke – where the party lost vote share – some overly excitable commentators are talking up the possibility of an upset in the Manchester seat.

But Gorton is very different to Stoke-on-Trent and to Copeland. The Labour lead is 56 points, compared to 16.5 points in Stoke-on-Trent and 6.5 points in Copeland. (As I’ve written before and will doubtless write again, it’s much more instructive to talk about vote share rather than vote numbers in British elections. Most of the country tends to vote in the same way even if they vote at different volumes.)

That 47 per cent of the seat's residents come from a non-white background and that the Labour party holds every council seat in the constituency only adds to the party's strong position here. 

But that doesn’t mean that there is no interest to be had in the contest at all. That the seat voted heavily to remain in the European Union – around 65 per cent according to Chris Hanretty’s estimates – will provide a glimmer of hope to the Liberal Democrats that they can finish a strong second, as they did consistently from 1992 to 2010, before slumping to fifth in 2015.

How they do in second place will inform how jittery Labour MPs with smaller majorities and a history of Liberal Democrat activity are about Labour’s embrace of Brexit.

They also have a narrow chance of becoming competitive should Labour’s selection turn acrimonious. The seat has been in special measures since 2004, which means the selection will be run by the party’s national executive committee, though several local candidates are tipped to run, with Afzal Khan,  a local MEP, and Julie Reid, a local councillor, both expected to run for the vacant seats.

It’s highly unlikely but if the selection occurs in a way that irritates the local party or provokes serious local in-fighting, you can just about see how the Liberal Democrats give everyone a surprise. But it’s about as likely as the United States men landing on Mars any time soon – plausible, but far-fetched. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.